Ashwin Shirvaikar, an analyst from Citi, maintained the Hold rating on DXC Technology (DXC – Research Report). The associated price target is $24.00.
Geoff Meacham has given his Hold rating due to a combination of factors impacting DXC Technology. The recent departure of Mike Salvino from his leadership roles within the company introduces a layer of uncertainty regarding the direction and effectiveness of the ongoing restructuring efforts and balance sheet improvements he had overseen. While the company has affirmed its fiscal 3Q24 outlook, it has only confirmed its free cash flow (FCF) forecast for the FY24, leaving some ambiguity around the expectations for revenue, margins, and EPS for the full year. This partial confirmation may suggest potential adjustments in the future, which could be a cause for investor concern.
Moreover, the hold rating reflects the current transitional phase DXC is undergoing, with an interim President and CEO in place and a search for a permanent successor underway. The search includes both internal and external candidates, which implies that it may take some time before a clear, long-term leadership vision is established. This transitional period could delay the company’s return to growth, adding to the uncertainties that are currently surrounding DXC Technology. As the market processes the implications of these developments, maintaining a Hold rating seems prudent until there is greater clarity on the company’s trajectory.
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DXC Technology (DXC) Company Description:
DXC Technology Co. provides technology consulting, outsourcing and support services. It operates through the following segments: Global Business Services (GBS) and Global Infrastructure Services (GIS). The GBS segment provides technology solutions that help clients address challenges and accelerates the digital transformations that is tailored to each client’s specific objectives. The GIS segment offers to deliver predictable outcomes and measurable results, while reducing business risk and operational costs for clients. The USPS segment delivers IT services and business solutions to all levels of government in the United States. The company was founded on 19th May, 2016 and is headquartered in Tysons, VA.
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